GST on Joint Development Agreement

1. Our understanding

1. Background and Understanding

1.1. In a Joint Development Agreement (JDA), we understand that there will be no direct monetary consideration towards the flats being constructed and handed over by the builder to the landowner. The builder would be given the right to develop the complex, sell his share of flats along with proportionate Undivided Share (UDS) land and retain the sale proceeds, though the entire land is owned by the landowner. Further, we understand there would be no transfer of such UDS land in favor of builder, in the absence of any registration of such land in builder’s favor (which is a must under the Transfer of Property Act), but the landowner would only agree to transfer the UDS land, to the buyers, who buys the builder’ share of flats.

Content of the Article been removed at the request of Author

Author Bio

Qualification: CA in Practice
Company: R. Rajan Associates
Location: Kochi, Kerala, IN
Member Since: 09 Feb 2018 | Total Posts: 1

More Under Goods and Services Tax

Posted Under

Category : Goods and Services Tax (5976)
Type : Articles (15922)
Tags : goods and services tax (4485) GST (4079)

2 responses to “GST on Joint Development Agreement”

  1. sprahakar rao says:

    Many builders under JDA prior to 1.7.17 are not paying any GST/service tax on the ground that they are selling fully constructed flats n hence no liability of service tax for the prior period or for the subsequent period of 1.7.2017 arises as the same were constructed prior to GST regime. Thus they are not paying service tax for the prior period though the flats were constructed prior to 1.7.17 but whose possession/sold after the said date. Is it correct practice?not to pay ST earlier & no GST now?

    • ajaykc1 says:

      If fully constructed flats/units are sold (outright sale) after obtaining the certificate of completion from the local authorities, it is not exigible to GST, provided no advance is collected during its construction. It is sale of property/real estate and out of ambit of GST. Entire consideration should be received after the completion.

Leave a Reply

Your email address will not be published. Required fields are marked *